Income Tax Return filing: 12 important documents you need this year
The annual ritual of filing income tax returns is here now, the due date being 31st July. Do you have all your documents ready?
Paying your income tax is the civic duty of every individual, and once you have all the documents planned and organized, filing tax returns becomes a lot easier.
Below is a list of twelve important documents that you should keep handy when filing ITR without any hassles. They are:
- Form 16
Form-16 is a very important document that salaried individuals need to have. It has the details of the salary paid, and the TDS deducted on it, if applicable.
The Form-16 is a mandatory document that employers have to issue if they have deducted TDS from their employees’ salary. It is formed of two parts, i.e., Part A and Part B.
Part A holds the details of the employee’s PAN, the PAN and TAN of the employer, and the amount of tax deducted from the salary. Part B contains a detailed breakdown of the salary.
Form-16 has now been revised by the government to include information about the tax-exempt allowance that the employees are paid as well as the tax breaks that they claim through their employer.
- Form 16A, Form 16B, and Form 16C
The Form 16A is issued to you from the bank due to the tax deducted from income sources like fixed deposits.
Form 16B is issued by the buyer when you’re selling a property. The form will show the tax deducted on the paid amount. In a different case, landlords get Form 16C from their tenants that states the tax deducted on the rent received. However, Form 16C is not applicable until your monthly rent exceeds Rs 50,000.
The forms mentioned above provide details to the taxpayer regarding the income received from various payees and tax deducted thereon.
- Form 26AS
Form 26AS or your tax credit statement is an essential document for filing your tax returns. It’s considered a consolidated tax statement for the financial year and consists of the following details of the taxes deposited to your PAN.
- Tax deducted by the employer and banks.
- Tax deducted by other organizations based on the payments made to you.
- Advance taxes deposited.
- Self-assessment taxes paid.
You can find and download the form from the TRACES website. Taxpayers need to log into their account on the e-filing portal and download it. But before that, they should make sure that the taxes deducted for the financial year is reflected in their Form 26AS. In case of any error, they can request for rectification and then claim for their TDS while filing ITR.
- Statement showing your capital gains from all sources
The income tax department has to be notified of capital gains from any sources like property sales, equity shares, or mutual funds through ITR. It is also important to have the purchase and sale deeds to file the income received from selling a home.
In the case of shares and mutual funds, one needs to have a statement from brokers and fund houses. Individuals filing the ITR-2 form must enter the details of the buyer’s name, PAN, and address. For a financial year, 10% tax is levied on capital gains from equity shares and equity-oriented mutual funds only if it is more than Rs 1 Lakh.
- Proofs and documents related to tax-saving investments
It’s mandatory for every individual to submit all the proofs of tax-saving investments done during a financial year such as 80C, 80D, and 80E. Therefore, it’s essential that you have all the required documents at your disposal so that any mhttps://www.goalwise.comiscalculation of investment tax claims can be avoided.
For example, a taxpayer has the option to claim up to an amount of Rs 1.5 lakh in one financial year under section 80C, provided that he has invested in EPF, PPF, life insurance, NPS, tax-saving mutual funds, etc. Moreover, tax deductions are also applicable to the health insurance premiums paid for self, spouse, or children. Section 80D allows claiming for a maximum amount of Rs 25,000.
If the insurance premium is paid for parents, the taxpayer can additionally claim a deduction of up to Rs 50,000.
- Information regarding unlisted shares
For salaried individuals who hold shares of an unlisted company, filing ITR-2 is mandatory. Investment details, including the PAN of the company, also have to be submitted during the filing, which are – the opening balance, shares acquired and transferred during the year, and the closing balance.
- Aadhaar card
Filling your Aadhaar card details while filing ITR is a compulsory procedure. In case the individual has applied for it, he can enter the enrolment number.
- Home loan statement
In the case of home loans, the individual needs to have the loan statement that includes the detailed breakup of both the principal amount and interest repaid to the bank. The document serves the purpose of proof and source of information while filing income tax returns.
Section 24 says that people paying the interest paid on account of home loan can be liable for tax exemption and can claim up to Rs 2 lakh. The taxpayer has to enter the details of the interest paid and rent received in the income tax return form.
- Pre-validated bank account
According to new regulations applicable from March 1, 2019, only e-refunds will be issued from the income tax department. These refunds will be remitted to the individual’s bank account who have linked their PAN. Therefore, it is important that your bank account is pre-validated with your PAN details before filing the returns.
- Bank account details
While filing ITR, you should provide the details of all the bank accounts that you hold, including your bank name, account number, account type, and IFSC code. You also have to ensure that the details you have provided are correct to facilitate easy processing of the refunds.
- Updated bank, PPF, and post office passbook
It’s advisable to update the passbooks of the bank, PPF, and post office before filing ITR. The process becomes simpler when you report the correct income details, dividend, and interest, along with the recently updated passbooks.
- Interest certificates from banks and post office
The interest certificates from banks and post offices are highly essential to collate the interest income earned from fixed deposits and savings accounts. It’s the responsibility of taxpayers to ensure the correct entry of the details of the interest income in the ITR. Hence, it’s recommended to get your interest certificates from banks and post offices so that you have the proper idea of the actual interest earned.
In case you don’t get the interest certificate, you can find out about the interest credited to your account by updating your passbook.
Every taxpayer must have the list of documents mentioned above, and check whether the personal and financial details entered are appropriate and accurate. Furthermore, arranging and organizing the documents will ensure a smooth tax filing process.
Ankur founded Goalwise an online mutual fund investment app in 2015 to serve as a ‘Fitbit to investing’. They pioneered an investing approach making it easier for users to set, track, and achieve their long and short term financial goals. A passionate Algo-investor, he honed his skills as a Researcher and Portfolio Manager at leading hedge funds such as WorldQuant and Oxus investments. He is an alumnus of IIT Kanpur where he pursued Computer Science and Engineering.